All Gas Stations NOT Created Equal

Close Encounters of the Cheap Kind has a new home at www.CheapEncounters.com!

Sorry for the last of posts over the last couple of weeks. We have just had a lot going on around our house to keep me off of the computer.

Anyway, yesterday as I was filling my gas tank at Sam’s Club, it occurred to me that perhaps not all stations are created equal. No, I’m not trying to feed you that line of bull that the gas sold by Sam’s, Costco, etc., is somehow inferior to that you purchase from one of the big name brands. I worked for one of those big names for three years and can assure you that all gasoline sold by anyone has to meet minimum standards and the only difference is any additive that is put in. Almost all gas has additives in it, and the difference between brands and non-brands is virtually nil.

No, I am talking about the way your credit card company treats the purchases you make at traditional gas stations versus warehouse club and grocery store gas pumps. Simply put, the credit card companies normally consider gas purchases at warehouse clubs to be in the same category as the purchases you would make inside the store. This doesn’t really matter unless you have a rewards credit card that pays a higher reward rate for gas purchases than other categories. For instance, my Chase Cash Rewards Plus card pays 5% for purchases at traditional gas stations, but only 1% for purchases at Sam’s Club (including gasoline).

Because of high gas prices right now, in many cases it is actually cheaper to buy gas at a traditional gas station with a rewards card than at a warehouse club. Take my fill-up yesterday. My choices were a Shell station at $2.859 or Sam’s Club at $2.789.

Shell @ $2.859/gal minus 5% credit card rewards on gas station purchases of $0.143/gal = $2.716 net price/gal

Sam’s Club @ $2.789/gal minus regular 1% credit card reward of $0.028/gal = $2.761 net price/gal

So in this instance although the posted price at Sam’s was lower, the price after credit card rewards was 4.5cents cheaper at Shell. For a 20 gallon fill-up that is 90cents difference. Filling up once a week at that rate the difference would add up to $46.80 over the course of a year. Obviously not a large sum of money, but if you saw it on the ground you would certainly pick it up.


June 19, 2007 - Posted by | Automotive, Credit Cards

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: